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| Sunday, 5 October 2003 |
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Business |  |
| News Business Features Editorial
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Improved profitability at SLT Sri Lanka Telecom (SLT) recorded a revenue of Rs 12.23 billion in the first half of financial year 2003 compared to Rs. 12.08 billion in the corresponding period the previous year, dispelling expectations that the company's revenues would suffer on account of liberalization. The company's profitability was significantly improved with profits before exceptional items increasing to Rs. 1.71 billion compared with Rs. 1.39 billion the previous year. However, post-tax profits after the exceptional non-recurrent cost of a Voluntary Retirement Scheme (VRS) implemented during this period amounted to one billion rupees. SLT's financial performance must be viewed in the context of the reduction in international call charges in March, but more importantly in the absence of any domestic tariff revision during the period. The company's profitability would have been higher had the long overdue revision of tariffs taken place as expected during this period. The revisions were implemented from September 01. While the VRS has cost the company Rs. 710 million, it is expected that this outlay would be recovered within a period of two years through reduced employee costs. The VRS would also enable SLT to achieve higher operating efficiencies in terms of a more productive staff. The other noteworthy feature of SLT's performance was its international business. While international call charges were reduced substantially during this period, this has spurred a rapidly increasing trend in the volume of international call traffic. The revenues generated from the increasing volume are expected to negate the drop in unit charges. |
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